maybe we'll get a deal. could happen. we'll find out. those are your key players. big meeting. big headlines here on cnbc, and let's wrap it up with this. it is time that things that make you go hmm, and today's story is really out of this world. actress kate winslet is reportedly headed to space courtesy of richard branson. winslet recently married branson's nephew, and you may remember last year winslet rescued branson's mother while on vacation. virgin galactic is going to launch flights. other celebrities on board ashton kutcher. no idea if she will hang out of the front of the spacecraft and say i'm king of the world. my mind is blown. mandy drury and bill griffith are up next. have a great weekend.

welcome to "closing bell," everybody. very important hour right now. over at white house lots of things going on. we'll keep you updated as it all happens. i'm mandy drury sitting in for maria bartiromo. >> i'm bill griffith. we're just three days away from the new year. still no fix on the fiscal cliff, but there are developments right now, as you know. brian just mentioning there. various congressional leaders and the president getting set to meet at the white house this hour to work on last-minute negotiations all in an effort to avoid those series of tax increases and spending cuts due to take effect next year. what we hear is the senate leaders are there. speaker boehner and minority leader nancy pelosi have yet to arrive, but now we're showing you live pictures. maybe somebody is going to get out of that car, and we'll see if any of the other leaders will be heading to the white house. this is speaker boehner right now heading into the white house. we'll keep you updated as this hour progresses here. >> indeed, meantime, more red arrows here on wall street as investors are awaiting for any signs of progress from the white house meeting which is about to

get under way. right now we're sitting smack on 13,000. we've clawed back from being below that earlier on today. the nasdaq has also moved to the downside by half a percent as we speak. the s&p 500, as we speak, folks, is now down for the fifth straight day. i think it's down about 1.3% over the course of this week. so far let's see what happens over the last crucial hour of this trading day. >> so the clock is ticking. all eyes are on the white house. we've got i'm an javers there in washington as we wait for the white puff of smoke to come out of the white house, eamon. >> reporter: kind of what feels like here, bill. a lot of energy at the white house, a lot of curiosity surrounding this meeting. what you can't see from here and what i can't show you, unfortunately, is just about 50 yards from here is where you saw speaker boehner walking into the building, and we've got a whole cadre of white house still press photographers up on ladders peering over the hedge trying to get a picture of the leaders as they walk in and just to the left of that crowd is another crowd of reporters all gathered around the stakeout cameras. that's where the leaders could

come out and talk to microphones if they wanted to say anything after this meeting. there's a lot of anticipation of whether they will say anything after this meeting, and it's widely seen that this would be a good sign for negotiations if they do come out and talk. a lot of previous white house meetings, they have not come out to say anything afterwards, so all those folks waiting over there might be waiting in vain here at this point, but at this point we know most of the major leaders are in the building, and we'll have to wait and see here what actually comes out of this highly anticipated meeting. >> go ahead. i was going to ask you what are we hearing about this idea, a pair of gop senators pitching a plan essentially to cut federal spending by $1 trillion in exchange for increasing the nation's borrowing limit by the same amount. >> one of many plans kick around washington, and what i would say to that it's not being mentions by the principal members of the congressional leadership who are here at the white house in this meeting right now, then it's not really going to fly in the limited time that we have left,

so what people should be focused on is whatever comes out of this meeting, not what press conferences are going on up on capitol hill among members of congress who are not invited to this meeting, so that's why all those camera guys are focused so much on who is going into the meeting and we'll try to get some indication of what happens in there. >> just saw nancy pelosi go. in all parties are now on site there at the white house. one political wag earlier today, eamon, said that when you get progress more from the quiet secret meetings. when they announce a meeting very publicly, that's more mohr political purposes and you get less progress. >> reporter: these highly anticipated things have an element of theatrics. seen negotiating sessions here where speaker boehner snuck in to the building on sunday without telling anyone in advance. that's where the real negotiations get hammered out. this thing might be different, we'll have to see. only so much time left saw there is a lot of expectation that at least a small deal might be in the cards here but we have to

wait and see. >> we'd love to see all four of them coming out of the white house holding hands and singing "cumbaya" and the question is what happens first in do we get a fiscal cliff resolution or does eamon lose his voice. >> save it there, buddy. >> it's the voice cliff. eamon, thanks very much. want to bring in our next guests for their reaction. >> "closing bell" exchange, dan greenhouse, cnbc contributor, we've got todd schoenberger from land coal capital, rick santelli, steve guilfoyle on the floor of the exchange with us as well. let's see. let's start with you, mr. grinch. you sell on any strengths, even now, even if we get a deal? >> well, fundamental analysis is thrown out the window. this obviously is a headline-driven market. any time you're hearing about something that's going to take place, any hint at any type of negotiation, any type of a deal, the markets tend to respond. right now i think the markets are calling their bluff right now. we're not expecting a lot out of what's taking place in

washington at this moment. here's a thing, guys. even if there is a deal, it's going to be tough. you'll have a knee jerk reaction. markets should be rallying, might be a great opportunity to sell into strength, because when you look behind the curtain of any deal that's going to happen, it's going to be remarkably bad for the economy. >> austerity on the way. >> absolutely. >> whatever we're looking at. >> talking about spending. the whole conversation has been about tax hikes. i mean, you can't -- you're talking about how many tax hikes and who is going to be involved, but we really need to address the spending issue. >> dan greenhouse, do you agree? >> more or less. i'll take issue with what mandy just said about cutting austerity. we know there's going to be a fiscal contraction next year. nothing in what these guys agree upon will add to the level of austerity. the types of things that we're talking about, adjusting the cpi used to compute social security benefits down the road, those types of things are not real austerity, and so we really shouldn't be worried about that in terms of 2013. >> so you see growth, dan? you see the stock market moving up? you see a year that will still

be positive for us in all of those respects, even if we do have, for example, massive spending cuts and tax hikes, that's what you're seeing? >> i take issue with the word massive, and i'm sure rick will as well. we think next year will be okay in of everything, but, again, to continue my "caddyshack" quote of late, this will be the terrible deal, there's nothing good that will come out of this in terms of the longer term health of the u.s. they are incapable of it. >> you're thinking ahead, todd? >> look at the spending cuts, 25% of gdp comes from government spending, historically it's 20 it is. if there's a cut in government spending, where is the lift coming from, consumers, investment? therefore, the u.s. economy, we're on fragile ground right now. >> short term, sarge, this market held hostage minute by minute by the developments out of washington. >> yeah, sure, if we don't see any kind of compromise whatsoever, you'll see this s&p 500 trading in the 1360s next

week. i think you'll get a short-term deal, address some of the issues, not really solve anything, kick the can down the road much like they do in europe and get your mild positive reaction going into the jobs data on friday. >> do you think we get a definitive move in this market one way or the other with some announcement out of washington, or is this market just so tired of all of the developments there? what do you think? >> well, there's still a risk-on trend, and if they kick the can down the road or actually come to some kind of compromise, that trend is intact, and you'll see going into the first few months of the year i believe very positive price action for all the equity indexs? >> what now, rick? what say you? what now? >> i liked dan greenhouse's comment. in a perverse sort of way. if there really is any austerity, you'll hear an ouch or some squawking or bellyaching which is the fiscal cliff. if we went over the cliff, they be we actually would have at least a touch of austerity, but nobody wants that. i contend, and i said this back in 2008, we're going to have to

experience some pain. i don't think there's any way around it. it's just a question they keep putting it off, and one final thought, i'd like the idea that lamar alexander and senator corker. >> bob coaching, right. >> the $1 trillion debt ceiling raised for $1 trillion of spending cuts, i think that's pretty good. i know we've heard it before. senator corker talked on the santelli exchange with me a week ago about it, but everyone is thinking about the debt ceiling, and i think that's where the meat is going to be, and the next three charts that we're showing are from august 5th of 2011 when s&p took away our aaa rating, and no matter how people remember it, the markets certainly didn't remember it at all. it didn't slow down the rally in the dollar, the stocks or any of the trade in the fixed income markets with yields dropping. >> we were talking about that issue on "street signs," rick. talking about andy brenner. the markets after a quick knee neck reaction kind of shrugged it off, right? >> i don't even remember. that's why i put it up. i heard andrew. i don't even remember a quick

reaction the other way. it was totally ignored, and in some ways in stocks it was actually off to the markets. >> do you think the markets will be able to shrug it off again if it happens again, rick? >> unfortunately, and i really want to underscore unfortunately, yes, because in the world i live in, i would actually like to see the markets, especially the fixed income markets, have three or four selloffs to send a message, but, unfortunately, the purse strings still seem real cheap. you know what congressional people do when money seems cheap. they spend more of it than they have. >> mandy, this is something we talked about yesterday in the absence of -- of market pressure. >> right. >> you know, what is the impetus for policy makers to concede their points? >> good point, absolutely. we agree on that one. >> thank you, guys. happy new year. if we don't see you later. i think we will see you later. >> where are we siting? about 50 minutes away from the "closing bell." at this stage the dow is back above the 13,000 mark.

a lot of the leaders have already gone behind closed doors. we'll wait to find out anything, anything at all that, comes out of the very important white house meeting. >> and when we come back, which dow components will be darlings and which will be the dogs of next year? our market watchers give you their fix coming up. >> plus, the ceo-of-starbucks appears to be confused about what the fiscal cliff is and why it is so important. >> we'll get into that. plus, after the bell, michigan congressman sander levin said going back over the cliff would also bring what he calls a human cliff. he'll join us live to talk about that and why failure to lead now would lead to chaos. all right. i'm being told right now that secretary tim geithner has also joined the meeting and vice president biden is also there as well. we have a whole committee gathering at the white house. >> heavyweights. >> these are the most actively traded stocks at the new york stock exchange right now. stay with us. back in a minute. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person,

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want to take you back to the white house where the gehrig in the oval office continues to grow here. we're heard now treasury secretary tim geithner has joined that gathering. want to have eamon javers step back in here and give us an

update. >> reporter: hi, bill. treasury secretary tim geithner is in this meeting that's going on here at the white house right now. what that would indicate to me, anyway, they will be talking a little bit about this debt ceiling situation as well as all the other different cats and dogs that have been rumored to be in this small deal and treasury secretary geithner's participation gives you a little bit of an expectation that they will get to some level of detail. he brings in expertise that would otherwise maybe not be in the room in terms of the fiscal and tax picture here overall, so that is an interesting development, so now we know of at least one other administration official. vice president biden is in the room as well as well as the four key congressional leaders and the president himself, of course. >> eamon, thank you. we'll be checking back as developments warrant. >> i think we're getting a news alert with s&p and the fiscal impasse at this stage is not going to affect the credit rating of the united states. there we go. >> i saw that. that hit just before we went to commercial, and i immediately looked to see if the markets

would respond, and they haven't. >> in fact -- >> maybe it hasn't been disseminated enough yet, but that is interesting, that even with this impasse, the s&p is not looking to downgrade us any time soon. >> that's very interesting, and also going back to what we were saying a moment ago, even if they did downgrade us, would the markets care? >> that's also a very good question. >> yeah. >> the first downgrade didn't have an impact. >> it certainly did not. >> no. >> and we're just pared a few points of losses and still sitting down 92 points on the dow as we speak. meantime, it's really funny how time flies with 2013 just a few days away. the dow is on pace for a better than 6% gain this year. what about next year though with 2013 around the corner? we're looking at which blue chip dow names could be the new darlings or the dogs in the new year. bill? >> taking us through this, chris johnson, director of research for jk investment group and michael kujino who is with permanent portfolio fund. gentlemen, good to see you both. thanks for joining us.

chris, it worked out perfectly for a stock like b of a which last year in 2011 was the worst performing dow component and this year it was the best performing dow component, so the dogs of the dow theory worked out that time, didn't it? >> right, he sure did, bill, and i think actually this one is going to be another darling for this year when you look out to 2013. it's interesting. the stocks almost doubled here in 2012 yet the analyst community has only 35% of their rankings in the buy category, so this one is a quiet performer. i think a lot of people were expecting regulatory environments to really play havoc with it towards the end of the year, and i think a lot of political capital will be spent on what's at hand right now obviously with the fiscal cliff, and obviously what we do with 2013, i don't think that you're going to see a lot of regulation questioned, asked during 2013. >> okay. >> i think this one is one stock that will benefit. you'll see the analysts start to upgrade it. >> that being b of a. >> wait until the dow goes

higher on your list for 2013. >> we don't do anything with respect to the theories of the dogs of the dow, but the generic sense of buying laggards for future outperformers is a broad one. higher growth names outperforming versus last year which was more defensive. what you do is look at the real laggards, hp and intel come to mind real quickly. >> right. >> they are down low for very good reasons. they are reason to be the desk top computing is definitely under siege with more mobile computing. the management issues with hp. all of those things need to be ironed out and as a result the stocks have underperformed. >> are you saying you would buy those here? >> we don't own them right now and not contemplating buying them right now. talk about strategy, you know, this is where you would look if you're espousing this strategy of buying longer term laggards that have underperformed. these are two, you know, exhibit "a" names that you would look at, but you'll have to be

patient and you'll have to wait out a lot of internal activity, especially with respect to h and p before you get some growth. >> chris, am i right in thinking that some of michael's darlings are actually some of your dogs for 2013? specifically intel and hp? >> let's look at intel, hp and also throw microsoft into the mix. one of the things we look at when we're looking at our expectations for the next year is how the stocks are performing fundamentally, technically and what the sent in the backdrop is. with all three of these companies, these are kind of like the whip manufacturers when you're seeing more cars driving down the street right now. that's kind of what i'd paint a picture for these. unfortunately, they are very large. it's going to take a long time for them to start to adapt to the changes in technology. these were innovators a decade or two ago and now they have become those companies that it's very hard for them to move the need. think about them trying to turn a cruise liner around in the hudson river. going to go back and forth and get very little progress here. i think that's what you look at for these companies in 2013. the analysts, unfortunately,

have loved them. lots of mutual funds hold them, and when they start to underperform i think we're going to see those people move away from those large technology companies, and quite frankly i think that's a bad thing for right now for microsoft, hewlett-packard and intel. we just aren't seeing innovation, and yet people still love them. >> i want to just ask you actually, chris, with respect to microsoft, because on "street signs," it was one of my predictions for 2013 that microsoft will continue to lose relevance. it's fighting too many battles, and in some cases losing battles and enterprise and mobile, in pcs as well. >> absolutely. >> and it may not even be in its current form in five years time from now. would you go so far as saying that? >> i would absolutely, mandy. i think if you think about microsoft, look back a couple decades at kodak and at&t. and what you found with those two case studies is kodak didn't change their model, didn't go out and really adapt to the market. at&t did when they saw their --

you know, their bread and butter going away. they actually changed their business model. microsoft is at that fork in the road right now, mandy, where they are either going to start innovating again and be relevant, or as you've kind of predicted here in 2013, kind of stay the status quo. make small improvements, still lose market share, and in that case i would see them going down the road of kodak, so i would agree with you wholeheartedly on that. >> thank you both. appreciate your thoughts. the dow is in the darlings of the dog for next year. >> we are coming back a little bit now. with 40 minutes left in the trading session, down 82 points on the dow right now. >> health care stocks jumped about 17% in 2012. will the climb continue next year? our experts pick some winners and some losers for the year ahead in that sector. >> and then next as lawmakers make a last-ditch effort to avoid the fiscal cliff, what's an investor to do right now? should you opt for the relative safety of gold in the new year, for example, or take your chances with, oh, how about

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as we speak, congressional leaders and president obama are meeting at the white house as they work on last-minute negotiations to try to avoid the fiscal cliff. our eamon javers also reported just moments ago that treasury secretary timothy geithner is at the meeting as well. we're going to monitor that situation for you, and, of course, bring you all the latest developments on that. in the meantime, oil is up for the week, but ending on a down

note today. cnbc's bertha coombs is at the center of all the action at the nymex. >> reporter: we're seeing oil back fractionally positive at this hour with thoseeadl crossing, but overall it was a somewhat down day after we got a disappointing report from the eia inventories delayed because of the christmas holiday. it was a smaller than expected drawdown in crude stocks, and also notable. we saw a $2 million barrel build when it came to crude stocks at the nymex hub in oklahoma. now at a record 49 million barrels to end the year. ironically we do have wti nymex up for the week, and it's actually been up for the last three weeks. part of the reason, we're seeing a number of funds and traders moving out of what has been a popular trade. if you take a look at nymex year to date, it is off some 7%, compared to brent crude which has actually been up quite a bit, and that is where we're seeing people take profits on

that spread that has been a very popular trade here at the nymex. overall the big issue next year once again is going to be getting that infrastructure to move all that growing production on land to be able to get it down to the gulf coast refiners. see you guys later. >> our birthday girl bertha coombs. thank you. >> thank you. >> happy birthday. >> thanks. >> see you later. so, with half an hour left in the trading session, stocks are lower as news on the fiscal cliff continues to develop, so as we creep closer to that cliff, how do you position your portfolio to protect yourself and still find growth? do you do it with stocks or gold? that's what we're doing. on the technical side is j.c. o'hara and on the fundamental side steve cortes, a cnbc contributor. welcome to both of you. stocks versus the s&p, for example, what do you charts tell you and what do you like? >> well, bill, i like stocks for the short term. when i say short term, into the year end, first or second week

of january, but they are getting concerning to me, so i really like gold over the intermediate term and my way to play gold is by playing the gld. recently the gld is bouncing lower off of a strong resistance at 174 on the charts. i think there will be short-term weakness in cold, but i'm using this as an opportunity to accumulate some positions. would i love to see it hit 155, 156 which is -- which is an upward rising support level. look at the options, a lot of activity down around that level which tells me there's interest, and i would love to be buying it right around there, and i think we have good upside. >> steve? >> what i don't -- >> i'm on the other side of gold. would you think with a name like cortez i would have sort of an inborn lust for gold but i did not. did not get that from my ancestors apparently. the problem with gold, first of all, a massive underperformer over the course of the past year. i think that's going to continue into the coming year and the main fundamental reason is look at the price performance of gold over the last several months,

even though we had question 3 and question 4 effectively announced. gold went dramatically lower after both of those events. the gold market is telling me that the fed, despite its best efforts, has been unable to create inflation, and i think -- >> do you like stocks better? >> i do like stocks better. i don't think either one is an insurance policy. if you talk about how to protect your portfolio, i think you want to protect it with high quality bonds, like the investment grade corporate bonds. their balance sheets are excellent. >> if you had to pick stocks or gold in this particular case you would pick stocks? >> i would pick stocks. >> and i also want the dividend. gold pays me nothing, a pure speculative bet on the psychology of the gold market whereas at least if you buy the s&p you know that you have a yield. >> if you look at the relationship between correlation -- between golds and the s&p, it was positive. they both moved together most of 2012. we're actually seeing the correlation turn to negative.

i do not like stocks because if you look at a longer term chart of the s&p, it's beginning to look very tired. we're in the 41st month of the bull market. most bull markets are only 33 months long. a chart i brought along shows you the average advance and decline, and i try to highlight that with the lines here. you've seen the advancers are slowing. before we were taking four steps forward and one back and now it looks like we'll take one step forward and two back in 2013. >> got to go. trying to make room for the white house meeting. thanks for your thoughts on gold and stocks as we go into the new year. mandy? >> sitting down by about 92 points, 13,000 mark for the dow. the s&p also still in the red, but, again, coming back from the lows of the day as we speak. bill? >> after the bell, the potential impact of the fiscal cliff in depth. the governor of montana is going to tell us why his state could get especially hard hit. plus, we'll hear from one rancher. this would be interesting. the estate tax and the impact it

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okay. heading to the final half hour trading on this friday, and everybody is watching washington, the meeting in the oval office continues now with the congressional leaders, the president, the vice president, the treasury secretary and anybody else that they can get

in that room to try to come to an agreement of some kind to resolve the fiscal cliff, and in the meantime the markets are trying to take a wait-and-see attitude here to kind of figure out what's happening as we close out this week. mary thompson is here on the floor with us from the new york stock exchange. mary? >> reporter: no white smoke coming from the chimneys at the white house so investors are in a wait-and-see attitude. markets are on track for a weekly loss. for the s&p it would be its worst weekly loss for seven weeks in the dow and the nasdaq. their worst weekly performance in six weeks. let's take a look at the sectors which were trading all of them actually to the downside in a week where investors, again, waited every day for any news of progress on signs of a deal to avoid the fiscal cliff. the weakest per forming sectors, energy, utility and tech. the best performers on the downside were financials and material and the standards to the upside were gold stocks as we take a look at these stocks. gold seen as a safe haven so

these stocks benefitted from that move from investors. so, again, that's what we are watching as we await what is going to be a losing week for all the major indices. back to you. >> unless something happens in the last half hour here, unless something happens in the last half hour. anything is possible. 25 minutes to go. the president meeting right now with congressional leaders, and treasury secretary and the vice president trying to hammer out this deal so we'll keep monitoring this situation and all the developments here for you. >> and the hopes that a deal can be reached. the house has been called back to work on sunday evening. 6:30 p.m. i believe is liftoff time, and my next guest is in washington already. michigan representative sander levin is the ranking democrat on the house ways and means committee, and it's fantastic to have you on our show. >> welcome back, sir. >> thanks. nice to be with you. >> what do you hope is happening at the white house right now? >> what do you suspect is happening? >> i'm not sure. i think it's 50/50. i hope they are sitting down and working something out because we

should not go over the fiscal cliff. i've been listening to your program all afternoon. i know there are varying opinions as to what would be the impact on stocks, bonds, but there would be so much more uncertainty in this town, and we really don't need it with so many issues ahead. tax reform, for example, immigration issues, climate issues, so many challenges. we should not go over the cliff. >> the farm bill. >> everything. >> the farm bill. >> the farm bill. >> you're talking about milk prices. >> right. >> so much is at stake. >> let me ask you. you know, as you well know, senators corker and alexander came out today, you know, with somebody's got to put something on table so you guys can talk about it and decide to come to an agreement of some kind, and their proposal was $1 trillion raising the debt ceiling. if there could be $1 trillion in spending cuts in the form of raising the age eligibility on

medicare and means testing it, in other words, charging more to those wealthier americans who would qualify for medicare. you and i talked about this the last time you were here. you kind of poo-pooed the idea, but wouldn't that be a possible starter to try and get a compromise of some kind with the gop? >> i don't think i poo-pooed it because medicare is now already income-related, and rather significantly. >> what about the age eligibility? >> i think raising it raises a number of issues. it's mostly a cost shift to other providers and to the insurance carriers and to everybody else. we've agreed to $1 trillion in spending cuts. that done in the budget control act, and the president, who is now meeting with everybody, has promosed another $1 trillion in spending cuts provided we have $1 trillion in increases in

taxes, having the middle class tax cuts continue but not for the upper income. if we do not continue them for the upper income, it would bring in about $1 trillion over ten years. >> in terms of what you have said about the upcoming tax season, sir, i believe you said it could be absolutely chaos. if i'm not wrong i think i read somewhere that the irs might possibly give a little window there for congress to sort something out come the new year, but nonetheless, what would you do if you were an employer? what would you do with paychecks and the tax there on to try and avoid some of that chaos? >> it would be very, very difficult. the irs sent us a letter saying they would try, but also we have the alternative minimum tax, as you know, affecting 20 million, 25 million taxpayers whose taxes would go up. we have unemployment insurance, by the way, 2 million people will lose their federal benefits tomorrow. it will be cut off. so there's a lot at take, and i'm hopeful, and i'm sure you

are, that something will come out of these discussions. one thing is clear, if i might say, and that is in the house that i belong to. there's going to have to be a combination of democratic and republican votes because the speaker has a conference that i don't think a majority of them will go along with anything, so we're going to have to -- we're going to have to have a coalition >> i wanted to ask you about that, because with the house set to reconvene 6:30 sunday night, have you heard anything about what may be coming to the floor, or is it all dependant on what's happening in the white house right now? >> it's all dependant. your focus on the white house is absolutely correct. we'll have to see what happens. i'm hopeful that something will emanate as they sit down because going over the cliff only increases uncertainty throughout the economy of this country of ours, and i think we should

avoid that. >> congressman, always good to see you. thank you, sir, for your time. >> meantime, let's get straight back to eamon javers who is in washington. eamon, we learning anything more about what's being said behind closed doors? >> reporter: we are learning a little bit more this hour about what's going on in this meeting here at the white house. let me give think update here that i just got from a source familiar with the meeting that is on going now, the source saying that the president is not, not going to make a new offer in this meeting today. instead, he's going to lay out what he did on friday before television cameras publicly which is that it's clear what can pass with both a majority in the house and the senate is protecting everybody from tax hikes who makes less than $250,000 a year and also an extension of unemployment insurance for 2 million people who might lose what they are calling a vital lifeline later this year as that expires. also saying that the president will tell the folks in this meeting, he'll ask them what they are willing to support if not to prevent us from going

over the cliff, and also finding out from those folks if they have a counterproposal to hear from them what they would like to do that could go to the senate for an up or down vote. that's what we're being told now, the president not making a new offer but reiterating what he said on friday and asking the folks across the aisle from him in the meeting if they have a counteroffer to that. additionally, i should tell you, got another piece of new information which is that at 5:30 this afternoon the white house will be holding a conference call with business leaders. i'm told that the president himself will not be on that call, but, in kt if a, they will be having a conference call to brief business leaders on the latest developments here, so we should wait to find out what the white house says there, but, again, that would seem is a battle to win the hearts and minds of the american business community in the wake of this meeting here today, guys. >> that source of yours trying to dampen expectations. there were rumors earlier in the day the president had something up his sleeve and the markets

were coming back and now they are selling off on your reporting, eamon. the dow is down suddenly 135 points a moment ago. coming back a little bit now, but it is clear that this market is hopeful that we can get something in the very near term. >> this basically eamon is the president saying it's my way or the highway, right? >> reporter: president is saying and ready directly from my iphone from the source familiar with the meeting. the president is not making a new offer. he is going to lay out what he did on friday which is what is clear and what can pass with a majority in both the house and the senate and what a majority of the american people support, includes protecting everybody under $250,000, as well as the unemployment insurance piece of what we've been talking about all along. i've been saying on the air today earlier that if you wanted to understand what was in the president's mind going into this meeting, you needed to look back at those comments that he made on camera on friday in which he laid out a very narrow deal at that $250,000 fresh tloeld.

>> now it's possible that the republican leaders, they could haggle and where they could increase the number but that's a point of where they have started. >> good job. thank you. we'll be checking back. pretty much lost any of the gains we possibly could have had earlier on. down 124 points right now on the dow and significantly back below the 13,000 mark. we're sitting at 12,972 as we speak. >> so with every tick of the clock, a fiscal cliff deal seems less likely, at least for now. what you just heard from eamon is not helping that cause. we'll get reaction from two market watchers coming up in just a moment here. >> also, after the bell -- >> they cannot cross over the threshold that has been built by grover norquist. >> well, harry reid says he is the reason there is no deal on the fiscal cliff. we're going to ask grover

norquist himself if there's any room for compromise when he joins us live. you've got to stay with us right here on the "closing bell." we're now down 133 points on the dow. [ rosa ] i'm rosa and i quit smoking with chantix. when the doctor told me that i could smoke for the first week... i'm like...yeah, ok... little did i know that one week later i wasn't smoking. [ male announcer ] along with support, chantix is proven to help people quit smoking. it reduces the urge to smoke. some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. if you notice any of these

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now developments from the white house. rumors today that at this meeting the president was going to come up a modified version of plan "b" to present to the congressional leaders, and you're eamon javers put a wet blanket on that, the source telling us that the president has no new offer to put on the table. he's most interested in protecting those people who make less than $250,000 when it comes to raising taxes, and the dow has fallen to near the lows of the session on eamon's reporting. down 139 points. let's get reaction. back with us is todd schoenberger and also joining us is cnbc's jeff cox. gentlemen, great to have you joining us. do you feel we're further away? >> stepping over dollars to pick up nickels. he has no deal. you're going to see this continued, carried over into monday and even and beyond, further deeper into 2013 because even if there is a deal, you still have to look behind the curtain, the details of it, the

spending cuts. how much are we talking about and the fact that the president of the united states is not willing to come to terms? >> do you feel that the president wants to go over? >> look, mandy, this is dysfunction palooza in washington. i've been talking about this since november. they can't get a deal done. they won't get a deal done. the market has been way too complacent. wall street, you were wrong. you were wrong. they are not going to get this deal done. the market is going to sell off chase to start 20 thrown. big >> it will continue to sell off. look, guys. here's the thing though. 25% right now of gdp is government spending. historically that's 20%. if there are going to be the spending cuts, that what we want to hear, john boehner. he's the adult in the room right now, guys and is looking like the bad guy because we have to stop the spending cuts. hitting the ceiling on the debt ceiling by monday. $16.3 trillion. you can't put a band-aid on this and suspect everything is going to be great and have howie

mandel say deal or no deal. not good for the overall markets or economy. >> it's clear that revenue is not on the table. >> what do you do, run for the s? panic is not an investment strategy. give us some good advice. >> this is a headline-driven market, so if there is any type of positive news out of washington, look for stocks to act positively. realistically you want to be in treasuries. cash or treasuries. only with the help from ben bernanke and company. >> thank you, guys. >> we'll keep an eye on that, too, as a matter of fact. thank you, guys. we'll see you later and wall street is throwing in the towel as we head towards the close. apparently fewer people want to be long going into the weekend. the dow now at the low of the session, down 160 points. >> indeed. next, even as star pucks stores in d.c. are riding together on come together on the fiscal cliff deal, it does appear the ceo apparently may not understand what exactly the fiscal cliff is.

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all right. the selloff is intensifying right now. if you're just joining us,

keeping tax on this meeting at the white house were the president and the congressional leaders and the vice president and treasury secretary. we've gotten word from our eamon javers that the president has no new offer to put on the table. that the hope going in, that we'd get some new development, some starting point to try to get us to a fiscal cliff resolution. that does not appear to be the case, and as a result the selloff has intensified, but now we're starting to come back a little bit here. a few people starting to pick up a few bargains. >> down 165 points at one point. part of the problem here is earlier on in the session we saw stocks rebounding from their really early on losses on the unconfirmed reports that president obama was going to come to the table, and he was going to offer a new plan to republicans, but now as we're getting this report from eamon javers, that's not the case and the giveback is going on in the market. the market, the s&p is down now for the fifth straight day. five days in a row.

this is something we've not seen in about three months time. >> having walked the floor of the exchange, the question you always get and the comments. it's all about the fiscal cliff, and all the traders on the floor today have been waiting for this meeting at 3:00, waiting to see if we'd get some developments, and as we said it doesn't appear tonight case. i think i'd be curious to see what the vix is doing, the fear indicator. that's been put in yellow flag territory above 20. >> sitting at 21.29. >> a level we haven't seen since july when the market peaked so a few more people are throwing in the towel as we go into the weekend. >> a pity. so much focus on what people call it noise or headlines, whatever we want to say. we did get positive economic data today, didn't we, in the form of housing data and home sales data and the chick pmi and that's pretty much being ignored and everyone is focusing on what headlines come out of washington. we'll be back with the closing

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about three minutes left and we're closing out the week near the lows of the week. this is the dow this week, and generally the hopes for a fiscal cliff resolution have been coming down here, and nowhere has it been more evident than just in the last hour. let me show you today's chart of the dow. early on we had the rumors that maybe the president had some new scaled down proposal to offer at the white house meeting, and then our eamon javers reported that that is not the case, and that's what took this market lower, and we're near the lows, down 138 points. my friend ben willis, you've been one of the more optimistic traders on the floor, optimistic we'd get a resolution. willing to buy the dips and now this happened. >> the chart you just showed,

mr. obama not buying anything newnew. anybody buying the dips had to puke them out. that's exactly what happened. professional traders, most of which have been in this week, most others on the sideline, you've bought vix protection, done pretty well as a helping but that's a great display of what happened. >> do you just not want to go into the weekend long, expecting a miracle? >> well, if i had to be forced in, forced into long positions on the selloffs on this kind of day i'd rather be long quite frankly than short against what might happen in washington. rather not have any position, but i'd rather be long than short. >> this has been a market that has shown resilience. >> right. >> with all the uncertainty out there to this point. could that change come monday if after the house meets on sunday night we still don't have a deal at that point? what do you think? >> being long is not a good position to be in, but that being said, if there's any indication of some hope, i think that the short position is going to get squeezed pretty hard, the same on monday. a